UK Government Consults on New Rules to Cut Broadband Rollout Costs

Last year Europe adopted new rules that are designed to make it both “easier and cheaper” to roll-out ultrafast broadband networks, which included a voluntary “High-Speed Broadband Ready” label for new build homes. Today a new consultation has been launch on UK implementation of the rules.

The idea behind the new EU Broadband Cost Reduction Directive is that civil works (e.g. digging up roads) can account for the lion’s share of development costs (sometimes as much as 80%), but it’s hoped that the new package will help to reduce this by around 20-30%.

As such the directive covers various areas, such as infrastructure sharing, rights of access to existing infrastructure, information sharing, coordination of civil engineering works, permit granting, dispute resolution and many other related changes. See our 2014 summary for a simple low-down on what all of this means (here).

The Directive’s 5 Key Pillars

Pillar 1 – Infrastructure sharing: Requires existing network infrastructure owners (gas, electricity, rail, highways, roads, waste water and sewerage) to give high-speed internet providers access to and information about relevant existing physical infrastructure at a fair and reasonable price (Articles 3 & 4)

Pillar 2 – Coordination of civil works: Requires infrastructure owners provide information and coordinate planned civil works (Articles 5 & 6)

Pillar 3 – Efficient Permits Mechanism: Streamlines permit granting for civil works (Article 7)

Pillar 4 – In-building infrastructure: Requires new buildings and major building refurbishments to be equipped with high-speed internet-ready in-building infrastructure (Articles 8 and 9)

Pillar 5 – Administration of the Directive: Proposes setting up a “Competent Body” to deal with disputes and penalties (Article 10-12)

The directive means that member states, such as the United Kingdom, must adopt national provisions to comply with the new directive by 1st January 2016 and they must then be enforced from 1st July 2016.

However the UK has already adopted many of the measures through existing legislation and Ofcom regulation (e.g. the Growth and Infrastructure Act 2013 and BT’s imperfect Physical Infrastructure Access solution), which means that on the surface it won’t have a huge impact.

Extract from the DCMS Impact Assessment

“In the UK many of these barriers are far less influential or problematic. Market based infrastructure sharing agreements already exist where there is a solution that is economically attractive to both sides. There have also been extensive trials to explore options for further sharing, for example Virgin Media’s trials using electricity poles to carry fibre cables in Wales.

The measures in the Directive do not materially change the incentives to make such a sharing agreement in the UK as they may do in other EU countries. Where it is economically attractive for both sides to share the market will deliver this activity, and that will continue to happen once the Directive comes into force. The Directive simply provides a regulatory underpinning to activity that already exists and will continue to exist in the future.

It appears unlikely that the Directive will lead to a significant change in the level of successful infrastructure sharing activity. The Department therefore aims to implement the Directive in a way that protects firms’ investment incentives. Should the Directive lead to additional infrastructure sharing, it must be on terms that are fair and reasonable to both parties.“

However it’s worth pointing out that the United Kingdom doesn’t really have a firmly defined policy for pushing superfast broadband into new build homes, even though the Government has attempted to push Local Authorities towards adopting a tougher stance on the matter as part of planning approval (here).

In the above sense the new rules do set a clearer guideline, even though it’s all still a bit flaky and largely unenforced. Crucially this aspect (Article 8) is being handled separately by the Department for Communities and Local Government (DCLG).

Installation of high-speed ready in-building physical infrastructure

Article 8 Of the Directive Sets out minimum requirements for in-building physical infrastructure to support high-speed communications networks in all new buildings and major renovations where a building permit application has been made after 31^st December 2016.

The Department for Communities and Local Government (DCLG) is implementing that requirement in England through amendment to the building regulations and it is therefore not considered within this consultation. Building Regulations are a devolved matter in Scotland, Wales, And Northern Ireland; The devolved administrations are managing their own public consultations on the requirements of Article 8.

The consultation can be found online (here) and the closing date for responses is at 11:45pm on 25th January 2016. The Government should have very little trouble meeting the EU’s deadline for implementation, although it will be interesting to see how many developers are prepared, particularly those that are attempting to build in rural areas where broadband upgrades may not yet have reached. It’s not always enough to merely rely on BTOpenreach to deliver the goods.